Sino Gas & Energy Holdings Limited (Sino Gas or the Company) disclosed Wednesday that, following a competitive process, it has signed a term sheet with Macquarie Bank Limited (Macquarie) to act as sole lender of a structured term debt facility of up to $50 million (the Facility).
Proceeds are to be used to support Sino Gas’ payments of its share of cash calls by joint venture entity Sino Gas & Energy Limited (SGE) to fund SGE’s working interests in the Linxing and Sanjiaobei Production Sharing Contract’s (PSC’s), located in the Ordos Basin, Shanxi Province, China.
Commenting on the binding agreement Gavin Harper, chairman of Sino Gas, said:
“With $57 million in cash as at the end of the March quarter and the Facility of up to $50 million, Sino Gas is strongly positioned to fund its development share of the PSCs towards early production and Overall Development Plan submissions and start the transition to becoming a significant gas producer”.
“Sino Gas has undertaken a strongly contested and rigorous tender process for the Facility and has negotiated very competitive terms with a reasonable headline interest rate and most importantly limited dilution to our shareholders with a modest number of options issued at a significant premium to our current share price”.
“Macquarie has an excellent reputation as a leading international investment bank and combined with its proven depth of experience in financing oil and gas projects globally, we see their involvement as a major endorsement of Sino Gas and our projects,” he added.
Key terms of the facility are:
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